Tag Archives: review

Not a happy week

Posted on by
Reply

Well, my trading sucks. I’m going to stop trading for a while, read through my journal, review my trades and find out what’s going wrong. Here is my weekly performance since trading the MAX live:

Weekly account performance

Win/Loss ratio since going Live

There are three possible reasons

  1. The system I am using is not suited to the FX markets at the moment
  2. The system I am using is not suited to me as a trader and I should really approach the market in a different way
  3. My psychology is getting the better of me and I’m not waiting for the best setups
I have a feeling that maybe the system I am using is not suited to me. When I first started with the system I had reservations about the number of indicators it uses. When reviewing failed trades it’s very easy in hindsight to point out what was wrong with it because there are so many indicators on the chart and they won’t all be perfect. When entering a trade there is quite often hesitation in my mind because I am not sure, but then I look at the indicators and they all look as they should be and I enter.
I am going to take another look at a very simple method I looked at over a year ago which is price action setups with support and resistance and combine that with an appreciation of order flow and the micro-structure of the market. When I first looked at it, I liked it but it seemed too simple to me, hence I passed on it. After thinking about it more and scrolling through charts it makes more sense to me and I love the simplicity. A lot of patience is going to be needed though because I am going to look at the daily and weekly charts and expect to take no more than 2-3 setups per year per market. This means I am going to have to look at a lot of markets in order to get a decent return so I may look outside of FX into other areas in order to provide returns.
I am not going to abandon the MAX just yet, however. I am going to still look at the market every four hours with the MAX charts and persevere a while longer. My psychology could be totally wrong and that’s what could be causing me to have such poor performance. I do however think, that in light of my poor performance with the MAX, that it would be prudent for me to look at other methods in case the MAX is simply not for me.
Share

July 2011 Performance Review

Posted on by
Reply

 

Well this month was a good month for me. My first month on my trading account in profit. The profit was small, but at least I didn’t lose any money this month. My live account has been open since 20 May 2011 and is still down 8% since I opened it. It just shows how long it can take to recover from a big mistake in trading. Here’s how the account looks at the moment.

First positive month

July saw an account increase of 4.8%, here’s some more stats for the month of July 2011.

Gross Pips Profit 808
Gross Pips Loss -158
Net Pips Profit 651
Avg Pips Profit/Trade 130
Profit Factor 2.77
Max. Consecutive Losers 1
Largest drawdown % -1.74
Total Acct. change % 4.8
Number of trades 5
Number of winners 3
Number of break-evens 0
Number of losers 2
Win % 60.0
B/E % 0.0
Lose % 40.0
Win/Loss Ratio (% Acct) 1.9

I only took five trades in the entire month and there was only one of those trades I was not entirely happy with (the CADJPY trade). So, I am still feeling positive, I believe I have made progress but I have the feeling progress is slow.

My target for next month is a minimum 5% account growth, but I’d really like to see 10%. If I achieve 10% I am going to reward myself by doubling the account balance in the trading account. This should be a good incentive for me to keep working on trading psychology, keep practising with my trading buddies and never give up.

Share

June performance review

Posted on by
1

As you can tell from the chart below, I’m still learning how to trade. I only traded for a week in May, but took 9 trades in June.

The majority of the loss in June was on one trade, in fact if I hadn’t taken the AUDJPY trade, then the account would have been flat for the month. I have learnt a lot of harsh lessons since trading live and I hope not to repeat my mistakes in July. I’ve just starting reading two books in parallel – The Daily Trading Coach by Brett Steenbarger and The Talent Code by Daniel Doyle. I’m hoping these two books can help me refine my technique and start reversing my declining equity curve.

I’m going to work very hard during July to increase the account from its current level.

Share

I made 0% this week and I’m not happy

Posted on by
Reply

Quite a busy week for me this week; I took three trades with two winners and one loser. The loser took away all the profits from the two winners. So I put a lot of work in to achieve pretty much nothing. I have learned a lot though from this week’s trading. Emotions. They get in the way of a profitable trading account and a steadily rising equity curve. My equity curve is all over the place right now since going live.

I believe that I now know the MAX rules pretty well, I do forget a thing or two occasionally but that’s becoming rarer. I now need to do two things: 1) Trade with flawless execution (no mistakes), 2) Trade without allowing emotions to govern decisions.

Share

Early November 2010 update

Posted on by
3

November in Switzerland

I’ve done quite a bit of testing on the strategy tester over this weekend and have now tested 130 trades in total. After some guidance from the MAX instructors I am starting to become a bit more fussy with my entries and that has resulted in a much higher win rate. I’ve posted some of my trades in the Application Room and had them openly criticised by the instructors and it was very useful indeed. They kept reiterating that it doesn’t matter if a market move is missed if the setup didn’t look perfect. In other words:

Quality over quantity

or

Only take the Grade A setups, why waste time on lesser ones?

Anyway, I thought you might be interested in the results so far over the last 130 trades. Using a 2% fixed risk per trade the results look like this:

Results with 2% fixed risk

Equity curve with 2% fixed risk looks like:

Equity curve with 2% fixed risk (click to enlarge)

I am starting to like using a 3% dynamic risk where I reduce risk gradually after losing trades. When using this risk profile, the results look quite different!

Results using 3% dynamic risk

The equity curve for this risk profile starts to look exponential:

Equity curve with 3% dynamic risk (click to enlarge)

Share

Four pairs done on the Strategy Tester

Posted on by
Reply

I’ve been working very hard recently and have now completed the EUR/JPY pair for Jan-Sep 2010. So I have now completed:

  • EURUSD
  • GBPUSD
  • USDJPY
  • EURJPY

I will proceed to the GBPCHF next – but I think I’ll have a rest now and start that from Monday 25th. I’m feeling quite tired after working so hard on the strategy tester and I don’t want to burn myself out.

The more pairs I do, the smoother the equity curve becomes. The largest drawdown has now moved from the end of August to the beginning of January, which is interesting. Here’s the new equity curve for the four pairs:

Equity Curve for four pairs (Jan-Sep 2010)

The stats on my database keep on improving as well, so I’m feeling good. Here are the latest stats.

Trade stats for four pairs (Jan-Sep 2010)

I’m pleased that the largest drawdown on the account over 75 trades is only 3%. That is the one figure that really impresses me about the MAX. The win % is still pretty unimpressive but the winners are much bigger than the losers so it’s OK. The win/loss ratio is 2.92 (the winners are on average 2.92 times bigger than the losers), this is what is growing the account. In other words I am managing to cut the losses short and let the winners run.

Share

“Account” doubled

Posted on by
Reply

I have just managed to double the account using the strategy tester. Here are the statistics:

100% return over 67 trades

And the equity curve:

Equity curve with 100% return (click to enlarge)

The observant among you will notice that there were 67 trades and an average account increase per trade of 1.07%, so why a 100% return and not a 67% return? The answer: compound interest! :-)

I’m still disappointed with the results, but I’m going to keep going and keep practising hard.

Share

Another currency “Strategy Tested”

Posted on by
2

I have just finished the USDJPY pair for Jan-Sep 2010 on the strategy tester. Three pairs tested, another fifteen to go… Boy, this is hard work. I have done eight hours work on the strategy tester today even though it was a beautiful sunny Autumn day outside in Switzerland. This goes to show how much I want this trading thing to work.

Beautiful outside today

Anyway, I’ve now taken 60 trades on the strategy tester and have grown the fictious account by 85%. I know a lot of people would think this is stellar performance, but to be frank with you, I’m quite disappointed. I am disappointed in a good way though, because I know that I can do so much better. I just need to keep at it, keep reviewing the bad trades and apply the techniques intelligently, patiently and not give up.

I’m going to test a pair I like next – the EURJPY. I will then do another pair I like, the pound-chuff (GBPCHF). We call Swiss Francs chuffs over here (just to annoy the Swiss). Here’s my equity curve with an 8 and 21 period SMA applied to it on my 60 trades of test data. It was seeded with a starting “capital” of $1,000. Pretty, eh?

Equity curve for 3 out of 18 pairs for Jan-Sep 2010 (click to enlarge)

Share

Phase 2 has begun

Posted on by
4

I have begun phase 2 out of 4 on my journey to become a professional trader. Just to recap the phases are:

  1. Scroll through thousands of charts and record 1,000 trades on the H4 timeframe over 18 currency pairs.
  2. Using the MT4 strategy tester (similar to forextester.com) replay the market tick by tick (or candle by candle) and take the trades as they unfold without the benefit of hindsight.  Mark the charts up fully with annotations and record them in Moo DB for analysis. I’m not sure yet how many trades I should do on this phase, but I think I should put in a couple of months work before opening a demo account.
  3. Open a demo account with the same capital the first live account will be opened with. Trade the demo account as if it was live and aim for three profitable weeks in a row. This phase is good to get to know the trading platform so that mistakes are minimised on a live account. If a losing trade occurs, then a further three weeks consistently profitable trading must happen before proceeding to the next phase.
  4. Open a small live account, under $10,000 and trade with 0.5% risk per trade. After three weeks profitable trading, move to 1%. After another three weeks, move to 2% risk per trade.
  5. By this time I will be consistently profitable on a live account. This would be a good time to inject further capital to accelerate the equity growth.

20 trades taken so far

So, I have taken 20 trades on phase 2 so far and as expected my win rate has dropped down to about 73%. I have already reviewed these phase 2 trades and I can see a lot of mistakes in them already. Some trades I should not have taken, some I should have exited earlier, some I should not have scaled in and some I should have scaled in when I didn’t. I’m really enjoying this phase even though I’ve only been doing it a few days as it’s teaching me a lot.

I grade each trade in Moo DB and trades that aren’t executed perfectly according to the rules, I replay in the market and trade it until it’s perfect. This way, I’m training my mind to learn the good way to trade not the imperfect way

The Piano

That’s not me, by the way!

I play the piano (actually I haven’t played much recently because I am working so much on my trading), and one thing you must not do when learning to play the piano is to play the wrong notes too much. If they are played too much then your brain learns this and you will always play a passage in a piece with the mistakes in it. It is very important when playing the piano to work through a difficult section slowly with the correct notes and play it 7-8 times perfectly before bringing it back up to normal speed. It’s also important to not go to sleep after playing a piece with mistakes in it because the brain cements those mistakes into your mind during sleep.

I think trading is the same. When I am training myself to be a professional trader I want to trade my method (the Max method) perfectly, and when I make a mistake on the strategy tester I will replay the trade until it’s traded perfectly. The more I do this the less I will need to replay, and the better my trading will become, until it’s almost perfect according to the rules. I want to get to a point where I trade the markets perfectly every time with no mistakes.

I blogged about a book earlier and I recommend you have a look and even buy the book, it goes into this theory a lot more. If you are an accomplished musician, sports person or artist I’m sure there’s a lot you can learn from those endeavors and apply them to trading in order to become the best you can be at it.

Share